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Page 3: Consumer trends

Over time, consumers' tastes evolve in response to changing fashions and greater awareness of alternative lifestyles. Businesses need to monitor these changes and, whenever possible, anticipate them. In terms of the product life cycle, quick service restaurants have reached maturity in the UK and need an injection of fresh life through innovative ideas if their lifespan is to be prolonged.

Market research reveals that snacking is an increasingly important trend and is particularly popular amongst teenagers and young people. However, the total number of meals eaten in the non-quick service restaurant sector has risen while meals eaten in the Quick Service Restaurant (QSR) sector have fallen in total. The convenience meal market is now worth over £800 million, with over 60growth since 1996.

The causes of this shift in tastes are not yet completely clear. Rising incomes allow people more opportunities to turn eating out into a more individualised experience rather than a routine 'quick fix'. At the same time, when it comes to informal eating out, people may be moving away from burgers and fries towards other meals that are promoted as 'the healthy option' e.g. sandwiches and salads.

Organic food is rising in importance and is forecast to account for 20of all supermarket food purchases by 2010. Chicken continues to increase in importance, as white meat is perceived to be healthier and safer than red meat. At the same time the traditional mealtimes of breakfast and lunch are becoming less significant and arrangements for the main meal of the day need to be increasingly flexible to accommodate changing consumer lifestyles. McDonald's is looking to provide appropriate solutions to these changing trends. In particular:

consumers are seeking more food variety and healthier eating - McDonald's is providing a more balanced offering that includes fruit, sugar-free fruit drinks for children and more chicken products

price is becoming more critical to decision-making - McDonald's has created an Extra Value Meal and a McChoice menu offering a flexible combination of drinks, sandwiches etc in addition to the meal, thereby providing excellent value for money.